Background
On 22 September 2022, HMRC initiated a new voluntary process for insolvency practitioners to help HMRC to manage the tax impacts of directors’ loan accounts.
The process was published by the insolvency regulators and is also set out at Dear IP chapter 8.46 found on the R3 website.
Under the process, insolvency practitioners were invited to send copies of their final reports in corporate insolvency cases to a new mailbox.
HMRC would use the reports to identify tax compliance risks which may, among other potential compliance responses, lead to a letter from HMRC to any director with an unpaid loan account.
These letters prompted the directors to comply with their personal tax obligations in relation to that loan.
During…